Delta September Revenue Less Than Expected

ATLANTA (AP) — A drop in last-minute travelers in September hurt a key revenue measurement for Delta Air Lines (NYSE: DAL) , the company said on Tuesday, although its fuel bill came in lower than expected, too.

Per-seat passenger revenue rose 0.5 percent in September. Delta had previously said it expected an increase of 1 percent to 3 percent.

Besides lower demand from so-called walk-up travelers, Delta's per-seat revenue was also hurt by its low number of cancellations. Delta completed 99.8 percent of its scheduled flights in September. One irony of the airline business is that per-seat revenue is actually higher if an airline cancels flights, because it then flies fewer seats, while most of those passengers will still fill empty seats on other planes.

September traffic fell 1.1 percent. Some of that was anticipated — Delta cut its flying capacity by 0.6 percent for the month. Still, with fewer travelers, its planes weren't quite as full. Occupancy fell 0.4 percentage points to 83.2 percent.

Delta also saved money on jet fuel because it switched suppliers as part of the transition to getting fuel from its new refinery. The switch changed the timing of when Delta accounts for its fuel bill — and it benefited from the timing change because fuel prices have been rising. The result was that Delta paid $3.09 per gallon for jet fuel in September and $3.15 per gallon in the third quarter. It had expected to pay $3.23 per gallon for the quarter.

Delta also reported a paper gain of $450 million on hedging contracts that haven't settled yet, meaning those gains from bets on fuel prices could go higher, or lower.

Delta shares rose 30 cents, or 3.2 percent, to close at $9.77.